Saturday, September 27, 2003
Others will write far more expressive, insightful rememberences than I. However I would like to say that the spirit of gameness that George embodied, perhaps best represented in his essay on playing amateur night at the Apollo, is something that I admired him for greatly.
To me the most tragic part in his death is that his debut album, Sneakin Sally Through the Alley, has been largely forgotten. It is a nearly perfect album which hasn't aged a day. It stands with Tom Waits' Frank's Wild Years, the Beastie Boys Paul's Boutique, OutKast's Stankonia, Tom Jones' The Lead and How to Swing It and Little Feat's Waiting for Columbus as an album I can listen to over and over until everyone around me is begging me to stop.
An album that I have to imagine is the only Robert Palmer effort to make any critics top 100 list none of it's songs turns up on either of his greatest hits albums. Backed by the Meters and members of Little Feat, with songs written by Allen Tousaint and Lowell George, Palmer would never have such awesome resource at his disposal again. The funk roll of Sailing Shoes into Hey Julia into Sneakin Sally Through the Alley is one the great moments in song arrangement of all time. It's pure joy to listen to Palmer wind effortlessly through the beautifully awkard twists and turns of Lowell George's Blackmail.
If you've never heard this little beauty, you really owe it to yourself...
Thursday, September 25, 2003
I have to say that it was a lot of fun watching the question move around the blogosphere (or should I say econosphere) (enough parenthesis dude!) taking on a life of it's own in other posts and then in the comment sections. Perhaps the most interesting thing was seeing this bizarre psychological tic that economist have regarding the minimum wage.
Last week I sent the following question to 7 econ - bloggers. Four responded. Of those, John Irons from Argmax respectfully declined as he got married over the weekend. Here is the question:
The minimum wage expressed in 2000 dollars had a value of $7.80 in 1968, $6.80 in 1979 and $4.75 today.
During the period 1990-1999, corporate profits rose 117.4 percent, the S&P 500 rose 297 percent, and CEO pay rose 535 percent. During the same period, average worker pay rose 32 percent.
According to Fortune magazine, median compensation for chief executives at 100 of the largest companies rose 14 percent -- to $13.2 million -- in 2002. The average chief executive is now paid 282 times what the average worker is paid, up from a 42 to 1 ratio in 1982. Still, that multiple is down from the peak of 531 to 1 in 2000.
"If the minimum wage, which stood at $3.80 an hour in 1990, had grown at the same rate as CEO pay, it would have been $21.41 an hour in 2001, rather than the current $5.15 an hour,'' the (Merill Lynch) report said.
Two common arguments against raising the minimum wage are possible inflationary effects and job loss. Why aren't these issues raised in relation to executive compensation?
Right after I sent the emails out tendering the invitations, I thought, "Oh. That question was pretty naive and at least a little sophomoric. You've really shown your ass now, Brazeau." Well as we'll see their is plenty of naiveté to go around.
Remember, the question is regarding the economic effects of sharply rising executive pay over time.
The award for lightning response goes to Arnold Kling at EconLog. He not only RSVPed but had a response posted before I got the taste of stamps out of my mouth from sending the invitations.
Here is his response:
I think that the conventional wisdom is that inflation is determined primarily by monetary policy. I do not think that contemporary economists would be inclined to blame inflation on increases in the minimum wage. The entire "cost-push" model of inflation has fallen out of favor.
Most economists continue to believe that a higher minimum wage reduces employment. It is a straightforward consequence of the laws of supply and demand.
CEO compensation does not affect inflation or unemployment, because CEO compensation is not artificially set above market-clearing levels. That is, CEO compensation is set by the consent of shareholders, whether that consent is granted in wisdom or folly. In theory, shareholders set compensation so that they maximize the quality of management relative to what they spend. In theory, CEO compensation serves to provide the incentive for the best CEO's to go to the companies where they can make the most difference, rather than wasting their talents on companies that cannot afford to pay them the highest compensation.
Personally, I believe that if CEO's were paid less, then the quality of management would decline very little, if at all. From a shareholder's perspective, I think I would be willing to lower CEO pay and risk losing the CEO of a company to a higher bidder.
I suspect that there is an opportunity for shareholders to increase profits by implementing stronger corporate governance that limits CEO compensation. However, the cost of establishing such stronger corporate governance might very well exceed the benefits.
This started a rich discussion that resulted in 39 comments. Starting on the 18th and continuing on until today.
The next response came from Zimran Ahmed at WinterSpeak:
When might minimum wage make low-productivity workers better off? Minimum wage, like rent control and protectionism, is one of those things that people are convinced will help the less fortunate, but in reality it makes the poorest of us even poorer. No one will hire someone for more than the value of their output, so a minimum wage of $5/hour prices out anyone whose output is lower than $5/hour. Given that $5/hour isn't much, such a person is not very productive and it seems perverse and cruel to deny them the opportunity to build the skills they need to become more productive, and command a higher wage. Arnold and Jane (via Marc) have covered the usual case where higher minimum wages hurt workers, as well as why this is separate from executive pay, so I'll deal with the outlier: when might minimum wage help low-productivity workers?
There's really only case in which this could be true. It's rare, but instructive, so here goes: If you have a monopsony, that is, a market where there is a single, monopoly buyer of labor, you will have an upward sloping supply curve where labor supplied is not very sensitive to price (wage). The monopsony employer might be selling into a perfectly competitive market, but it's the only employer (buyer of labor) in town.
In this case, the monopsony can maximize its profits by restricting the amount of labor it buys and lowering the price. This is the mirror image of the more common monopoly seller raising it's price, selling less, and maximizing profit. In a monopsonist market for labor, raising the price of labor through a minimum wage will increase employment and benefit the economy as a whole (the employer will be slightly worse off, but its loss will be smaller than the overall gain). In such a situation, a minimum wage will make both the employees, and society as a whole, better off. Note that if the market is not a monopsonist market for labor, a minimum wage will price low productivity labor out and hurt both them, and society as a whole.
The nice thing about this analysis is that it reduces an emotional "raising minimum wage will help/hurt labor" to an empirical test: how many similar employers are competing for labor in this market (or, how elastic is the supply of labor for a particular employer)? In a remote town with just one employer, labor supply will be pretty inelastic (there aren't many substitutes) so you could expect a minimum wage to be less harmful, maybe even beneficial, there. But in the areas we most closely associate with minimum wage labor: fast food, entry level retail, low level services, there are lots of similar jobs around so the labor supply should be pretty sensitive to price. It isn't hard for a fast food worked to flip burgers somewhere else.
So if anyone claims raising minimum wage will not hurt low productivity workers, ask them to demonstrate a monopsony market for labor. But don't expect to change any minds.
The next person to respond, was Jane Galt at Asymmetrical Information who picked up the question from Arnold. Here is her cut, edited slightly for space:
Arnold Kling offers an answer, which is that the "cost-push" model of inflation that this question assumes has been largely abandoned in favor of Milton Friedman's "inflation is always and everywhere a monetary phenomenon", and that CEO pay doesn't cost jobs because it isn't artificially setting the wage above market levels.
Think of it this way: every company is going to have a CEO. Someone, after all, has to make the final decision about the color of the seat leather in the corporate jet that flies everyone to marlin fishing weekends with clients. A higher level of CEO wages is not going to reduce the need to have someone in charge. While I'm well aware that CEO raises are often, as John Kenneth Galbraith liked to say, "in the nature of a warm personal gesture from the CEO to himself", the phenomenon is self limiting; in most cases, the board isn't going to pay the CEO more money than the company has. And if they do, the company won't be around for him to be CEO of much longer, and that's a case for the criminal court, not the court of public opinion.
The reason that the minimum wage is problematic is that it is also self-limiting, only because companies can't pay employees less than the minimum wage, what generally gets limited is the number of jobs. And the people those job losses tend to hurt are generally the people who have the hardest time getting established in the labor market; if you can only hire half as many people as you used to, why take a chance on some welfare mother, or a guy who's done time, when you have an ample supply of middle class teenagers whose parents will give them hell if they get fired to choose from?
...And even living wage laws produce a nice contraction in the labor market unless there is a very strong public worker sector agitating for big tax increases. Which themselves push some companies out of business or out of town. For it is a simple fact that no employer is going to employ someone whose work is worth less to them than the required salary.
They'll just pass on the costs to their customers, you may say. But in order to cover the cost of capital, the price of goods will have to rise by more than the increase in the cost of labor. And what customers are most hurt when the cost of goods and services rises? The poor. Labor costs are a higher percentage of total costs in their retail outlets, where real estate is cheap and "shrinkage" is a bigger problem that must be combated with extra security. Attempting to cure poverty by increasing the minimum wage is thus somewhat recursive.
Consider a retail outlet that competes with high-productivity catalog and internet outlets. A doubling of the minimum wage could easily be the difference between success and failure for that store, as productivity differences mean that the retail outlet would have to raise its prices much higher than competition will allow to recoup the new costs. We have "raised productivity" by shifting work to outlets that can generate more sales per employee -- the reason Europe's productivity levels are so high is that most countries have made it uneconomical to employ lower productivity workers. But is society better off? Are poor people better off? It is likely that the people taking orders for those catalogues are better off than the people who worked in the retail store.
Now, those of you who know me as a free trader have heard me argue that while this sort of adjustment is wrenching for those in displaced industries, over the long run everyone is better off. This would be true, except that unlike when this happens in the free market, when the government intervenes, it breaks the market clearing mechanism. In the free market, people are let go because changes in productivity or markets have made it uneconomical for their company to employ them. In the case of a high minimum wage, the government has intervened to make sure that no one whose productivity is less than $15 or $20 an hour is worth hiring by any company. Those people are unemployable. Forever.
(Or until they get some skills. The problem is that entry level jobs are generally where uneducated people go to get skills. GED's and other government training programs, the usual suggestion, have an appalling record at generating employment for anyone except people who work for government training programs.)
The excessive CEO pay encouraged by the free-for-all atmosphere of the 90's was undoubtedly repulsive. But it isn't analogous to the minimum wage, and we needn't worry that we'll find hordes of hungry investment bankers on our street, trying to make the rent on the yacht.
The next entry was Steven Antler at EconoPundit, who hands down get the award for promoting the forum. He writes:
[In what follows we assume by "inflationary effects" Brazeau means "price impact" rather than chronic inflation.]
First, white collar offshore outsourcing job loss is (rightly or wrongly) coming to be the hot topic in some circles. This is almost certainly related to outlandish executive compensation at the highest levels.
The employment impact of any wage adjustment is always felt not only at-level but at near-levels. Just as raising minimum wage affects jobs and wages at minimum level and also for those immediately above this level, so high executive compensation squeezes the upper management budget, possibly leading to white collar outsourcing.
Because of basic arithmetic, price impact is another matter. In an industry employing minimum wage workers, the wage bill is a large fraction of total cost. An outlandish CEO salary, by contrast, is almost certainly a tiny fraction of total cost. Raise the minimum wage and you have a substantial cost increase to shift forward to your customers (if you can). Cut out the highly-paid CEO, however, and it's a different story. Even if upper and middle management feel the difference, it is doubtful you'll make any real price difference to your customers.
But look, these are "gotcha" answers to what is, after all, a "gotcha" question. The real spirit of the question is this: how can we face our very real discomfort at the apparently growing CEO salaries and stagnating minimum wage rates?
First, we've got to remember income mobility exists. People move up the income ladder over time. Few minimum wage workers stay at minimum level all their lives.
Second, we should simply ask: what do the workers think? We have a much clearer answer than is generally acknowledged.
The Mexifornia phenomenon, it seems to me, can easily close the discussion with few questions asked. This, one of the largest migrations in known history, is best described as a mass movement, a population larger than some European countries, voting with their feet in favor of the minimum wage.
And another way to close the discussion is to ask what native born American workers think of the matter. Since the middle of the nineteenth century there's never been a shortage of politicians preaching the evils and inequities of capitalism. This notwithstanding, the doctrine has never caught on with the working class itself. Think of it. That's 150 years of failure. Even though many anointed intellectuals might wish it otherwise, the American working class has never abandoned the ideology of the American Dream to embrace, instead, European-style class politics.
The final response comes from Barry Ritholtz at The Big Picture. Barry picked up the question from Steven and asked if he could join in. The more the merrier I said. Here is his response:
Let's parse the issues into thirds: 1) Political; 2) Economic; and 3) Corporate Governance.
1) The most obvious distinction is Political. Raising the minimum wage requires legislation to be passed by Congress, and signed into law by the President; Raising executive compensation does not. Broad economic arguments which paint the issue in terms of nationwide job losses is an effective rhetorical political strategy regarding minimum wage; That
method has no resonance as to the issue of CEO pay. It doesn't take much bombast to frighten Congress into fearing less job creation; On the other hand, no one cares much about CEO pay until we see numbers in excess of several $ 100 million dollars (Just ask Dick Grasso).
2) Economically speaking, the inflationary effects and job loss arguments are fairly parallel between execs and min wage workers. The caveat is that the latter is true, while the former isn't always so. Job loss is simply based upon the math of how much firms have to spend. If the minimum wage is bumped to $10, and a firm has $1200/week budgeted for a new hire, they'll hire 3 full time employees ($1,200 = 40 hours x $10 x 3 workers). If the minimum wage is $6, they'll hire 5
full time employees ($1,200= 40 hours x $6 x 5 workers). The $4 difference in minimum wage just cost 2 jobs. Similarly, if a company replaces a $1 million/year CEO with an exec who gets $11 million a year, then there's $10 million less for other items. The company can no longer afford 200 employees @ $50,000 per/year.
Economic argument "Part B" is whether its inflationary. My short answer is "it depends upon the macro environment." Longer answer: Consider the present: We have massive fiscal and monetary stimulus: tax cuts, increased money supply, 2 wars, lower interest rates, deficit spending, more tax cuts, and a weak dollar. All of these items could be considered inflationary -- at the right time. Now, that stimulus is hoped to be reflationary -- stimulating to the economy. Yet if you took
any one of these factors, and dropped them into the 1970s, it would be horrifically inflationary. It's relative to the complex and chaotic machinations of the world's largest economy.
3) As to Corporate Governance, who has the expertise and resources to evaluate wasteful crony capitalism? Its time consuming evaluating outlandish pay packages. It makes no financial sense for each and every shareholder to invest all the time, energy and money into researching the relative merits of all the potential board members for all their
100 share odd lot stock holdings.
Large institutional holders, on the other hand, have the resources, expertise and incentives to do so. They represent pools of millions of investors, and they certainly know what's in a shareholders best interest financially. Why they don't bother is beyond my comprehension . . .
In my opinion, Barry gets the award for the most thorough well considered response.
OK. My turn. Starting with Executive Compensation:
For the record, I don't think that Dick Grasso should have lost his job. Wrong answer to the right question.
"In theory, shareholders set compensation so that they maximize the quality of management relative to what they spend. In theory, CEO compensation serves to provide the incentive for the best CEO's to go to the companies where they can make the most difference, rather than wasting their talents on companies that cannot afford to pay them the highest compensation."
In practice, as has been noted, shareholders have very little to do with setting executive pay. The enormous salaries of professional athletes are set by the market. The CEO compensation often has little to do with market economic. In an environment of interlocking boards of directors, CEO's find themselves at the top of heap, on top of the market looking at each other asking, "Dude, look at all this money. What should we do with it?" "Dude, let's give it to each other."
CEO compensation increased nearly 500% through the 90's. What's the "theory" for that?
"A higher level of CEO wages is not going to reduce the need to have someone in charge. While I'm well aware that CEO raises are often, as John Kenneth Galbraith liked to say, "in the nature of a warm personal gesture from the CEO to himself", the phenomenon is self limiting; in most cases, the board isn't going to pay the CEO more money than the company has."
Jane I refer you to Barry's point:" if a company replaces a $1 million/year CEO with an exec who gets $11 million a year, then there's $10 million less for other items. The company can no longer afford 200 employees @ $50,000 per/year." As to the second point, only an economist would think that that was a point.
"these are "gotcha" answers to what is, after all, a "gotcha" question. The real spirit of the question is this: how can we face our very real discomfort at the apparently growing CEO salaries and stagnating minimum wage rates?"
Actually Steven, I asked the question in earnest, hoping someone would do the math. But nobody bothered in their responses to show rather than assert that executive compensation was in insignificant part of the big picture.
But wait a minute sports fans the most direct answer to the question turns up in Arnold's comments section. Delivered by someone who was invited to answer the question but chose instead to answer some other question. 5 days after Arnold posted, buried 28 comments in, Zimran came through with this:
Total CEO pay in 1991 was $6B. If they were to work for free, and nothing else changed, every worker would be paid, on average, $54 more. Big whoopee. Moreover, if CEO pay is treated as a perp, it costs about $120B (at a 5% discount rate). That's $120B out of an organizational marketcap of about $9.1T. That's 1.6%. Slightly bigger whoopee.
So Zimran gets the award for the most direct response to the question. Why didn't you say so in the first place?
Let's look at those numbers for a second. Now I admit I'm not an economist. The only thing I remember from freshman Macro was that the professor cut his tie off with Big Scissors to demonstrate how to curves intersect. I still don't even get the scissor metaphor. My numbers are going to be all wrong and I hope someone who knows what they are doing will follow up on this with real numbers, but I think a little cocktail napkin math is in order:
Zimran only looks at CEO pay. The question was about executive pay. There has to be at least five other execs at a large corporation whose pay is driven by the CEO's pay. Let's be conservative and say:
1.6% x 3 = 4.8% Not so insignificant.
I realize the $120B/1.6% number is spongier and it will exaggerate my results, but it's the only number you've given me to work with and hey, it will exaggerate my results.
Now my dear Zimran, those numbers are old. Using the Merrill Lynch study cited above let's update them.
From 1991 to 2001 CEO pay grew by 473%. I don't know what the market capitalization was for 2001 was so I looked at the growth in GDP for the same period (37%) and figured that it might have grown at a similar rate. (That seemed reasonable to me, like I said, I hope someone who knows what they are doing will take a crack at this.)
$120B x 473% = $567.6B | $9.1 x 137% = $12.5T | So CEO pay represents 4.5% | 4.5% x 3 = 13.5%
Big whoop. Wouldn't that have a price impact? (cool new phrase, thanks, Steven)
Executive compensation represented a fairly insignificant part of the big picture in 1991. Is that still really the case?
Instead of going off on the Minimum Raise tangent, there were many related Exec Comp issues I'd love to see covered. My favorite came from Brad Hutchings in the first comment on Arnold's post:
In a discussion of CEO compensation, I also think it is important to differentiate between professional CEO's and entrepreneur CEO's. I would imagine that Larry Ellison, Scott McNeally, Steve Balmer, Steve Jobs have a more legitimate claim to their respective compensation packages in the eyes of their shareholders and stakeholders than do Jack Welch, Lou Gerstner, or Al Dunlop (to name some prominent has-beens).
We could call this the Roark/Keating conundrum. Anyone want to pick this up? Perhaps a memo from the Desk of Jane Galt?
On to minimum wage. Now remember, I didn't raise the minimum wage.......issue. Although I certainly bear responsibility for unwittingly stirring some embers I had no idea were so hot.
"I do not think that contemporary economists would be inclined to blame inflation on increases in the minimum wage."
Tell that to the "economists" that the restaurant industry rolls out whenever there is a campaign to raise the minimum wage.
"Consider a retail outlet that competes with high-productivity catalog and internet outlets. A doubling of the minimum wage could easily be the difference between success and failure for that store, as productivity differences mean that the retail outlet would have to raise its prices much higher than competition will allow to recoup the new costs."
Who's advocating doubling the minimum wage in one fell swoop. You're setting up straw men and beating the stuffing out of them.
No one will hire someone for more than the value of their output, so a minimum wage of $5/hour prices out anyone whose output is lower than $5/hour. Given that $5/hour isn't much, such a person is not very productive and it seems perverse and cruel to deny them the opportunity to build the skills they need to become more productive, and command a higher wage.
If you believe that people don't get hired for more than they are worth then you just aren't reading enough Dilbert. In 5 out of 10 restaurants that I've worked in the biggest salaries went to people that hurt productivity, morale and profits. Those restaurants survived because employees worked around them, they did this out of pride in their work, concern for customers or just to make their own lives easier. I call this the Hong Kong Fooey Phenomenon. The cat who never said anything was always responsible for saving the day never got any credit, while the incompetent Hong Kong Fooey got all the credit. One restaurant where I worked took a $70,000 loan out to stay a float. Certain wags on staff couldn't help but notice that was exactly equal to the salaries of the chef and the general manager.
I'm not sure who you think's labor is less than $5 an hour. I can only assume that you're referring to severely disabled and those in the late stages of drug or alcohol addiction. There are programs that make allowances for the severely disabled to work for less than minimum wage. For instance, quadriplegics are hired to sit with a stick in their mouth pushing envelopes across a light table to see check if there is anything in the envelope. As for those in the late stages of addiction, they need on demand intensive treatment. Not $3/hr jobs. Last year 570,000 workers were reported earning exactly $5.15, the prevailing Federal minimum wage, and another 1.6 million were reported with wages below the minimum.
Everyone seems to be assuming that there would be a smooth curve to 1cent/hr if the minimum wage was removed. This ignores the role of social services in the equation. I have to believe that this causes the curve to get a little turbulent down there.
Few people considered the effect on innovation that the minimum wage has. Innovations that replace low productivity workers were mostly seen as hurting those workers. I would argue that that is short term and that those innovations over time amplify their productivity.
Alas, on the minimum wage issue, which generated so much digital ink, no one looked at the demand side upside and no one offered any empirical evidence to make their case. One person in someone's comments(I can't find the comment anymore) brought up the Pennsylvania/New Jersey study. That study compared two neighboring states with similar economies when one of them raised their minimum wage. Unemployment in NJ actually declined when they raised their MW above the national MW. The fast food sector saw growth and increased employment. When fast food workers had more money to spend, they spent it on fast food, which allowed fast food restaurants to hire more fast food workers who had more money to spend on fast food which...ok enough.
That may be only one study, but it's one more than anyone else cited. Someone in Jane's comments cited closing restaurants in California as the fallout of a MW of nearly $10. A) the MW is $6.75 B) national recession, dotcom bust, energy crisis C) In a well run restaurant no job is worth less than $10. In a poorly run restaurant no job is worth more than $10.
Las Vegas is currently going through the only blue collar housing boom in the country. This is being driven by the success of HERE in wall to wall organizing of the Hotel and Casino industry. The unemployment rate in Las Vegas is 5.6%. Not a minimum wage example but instructive nonetheless.
To Zimran's admonishment:"So if anyone claims raising minimum wage will not hurt low productivity workers, ask them to demonstrate a monopsony market for labor. But don't expect to change any minds." I would reply:"So if anyone claims raising minimum wage will hurt low productivity workers, ask them to demonstrate something that actually happened. But don't expect to change any minds"
Here are some real world questions:
A) What is the correlation between the changes in the actual value of the minimum wage and changes in the unemployment rate? ( I can't find the annual unemployment rate history this morning and I've got to get this done or I would do it.)
B) How do those correlations compare to other countries with higher MW and on MW?
C)What was the effect on unemployment when the minimum wage was first enacted?
D)Agricultural work is exempted from the MW. How does Watsonville, CA's unemployment compare with that of the nation over time?
E) As Jane asks, " the reason Europe's productivity levels are so high is that most countries have made it uneconomical to employ lower productivity workers. But is society better off? Are poor people better off?"
A recent EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. These results are similar to other studies of the 1990-91 federal minimum wage increase, as well as to studies of several state minimum wage increases.
I'm not as superstitious about theoretical supply and demand charts. I want to know what's really going on.
So that wraps up this "Brazeau Blogonaut Challenge" (thanks Steven, that's just great.) I'd like to thank everyone who participated for their hard work and for being good sports.
Next challenge: Given the collapse of the WTO talks in Cancun. What do you think is the most strategic next move for the G21?
Invitations are already out, but anyone who wants in email me.
As long as I have a bunch of Econoheads here: I do an Organized Labor News Round Up every week or so. You can always access the most recent in the margin under 'what you've been missing'. You'd be surprised how much interesting union news can pile up in ten days.
P.S. I think it would be great if everyone congratulated John Irons on his marriage this past weekend.
P.P.S. Steven where did that thing about European socialism never catching on in the US come from? That doesn't have anything to do with anything.
Wednesday, September 24, 2003
WASHINGTON, Sept. 22 - Ed Gillespie, chairman of the Republican National Committee, said today that recent attacks on President Bush by Democratic presidential candidates amounted to "political hate speech" that would not sway public opinion.
..."I don't believe the American people are going to confuse hatred for passion," Mr. Gillespie said at a breakfast with reporters. "People like passion in politics, and they like a passionate politician. But the way these Democrats talk about the president is off-putting."
...Mr. Gillespie lobbed some criticism of his own, poking fun at a recent appearance by Howard Dean, the former Vermont governor, on the HBO series "K Street" and comparing recent Democratic debates to "The Jerry Springer Show," the daytime television talk program in which participants often scream and fight.
"I keep waiting for somebody to throw a chair," he said.
The defensiveness and disingenousness underlying his "hate speech" remarks is heartening. The willfull misrepresentation of the debates is contemptible. The debates, if anything, have been sadly boring. I think the candidates have been far too nice to each other. Aside from the obvious problem of nine candidates making it hard to get a sense of any one candidate, the politeness has precluded our getting a better sense of what separates the candidates and preempted the survival of the fittest rough and tumble needed to see what they are made of.
I wish someone would throw a chair.
US President George W. Bush and President Jacques Chirac of France avoided a head-on confrontation over Iraq on Tuesday but made no obvious progress in bridging their differences over a new Security Council resolution intended to set the course for a return to Iraqi sovereignty.
Delegates attending the UN General Assembly saw some hints of movement but no substantial concessions from either president.
Conservative pundits have been just beside themselves watching France attempt to get the Administration to jump through some hoops on Iraq.
They have correctly characterized Chirac's initial demand that power be transferred to the IGP in a matter of months as foolish. Sovereignty should not be transferred in a matter of months and it certainly should not be transferred to the IGC.
They have also characterized his signaling that he would not block a new resolution as an admission that his position was foolish.
I believe that it is more productive to view his proposal as an opening salvo in a tough negotiation. By opening with a position so obviously uncomfortable to the all but intransigent Bush crew he was hoping to move the debate towards a workable center. Which is what is starting to happen.
Cries will go up that French intransigence belies their desire to see the US fail in Iraq, bringing France closer to fore amongst nations. I would say that French intransigence has come from a correct analysis that they were critical of an unstoppable juggernaut that only the strongest protestations could put any sort of drag on.
Pre-war calls for multi-lateralism and pre-war skepticism of the nature of Saddam's threat, his relationship to Al Queda have both turned out the be prescient . It turns out that clear-eyed, hard headed liberal realist's may have something valuable about how we proceed in Iraq.
This graph from the Iowa Electronics Market represents exactly how I feel about the Dems shot today. See where BU|ODEM and ODEM have picked up in trading after the weekend? After Clark plunged our sense of hope into darkness within 72 hours of announcing, hope springs anew. Albeit cautiously.
My cut at interpretting this graph is this: Clark is such a lousy candidate that he'll be irrelevent within six weeks and Dean can get back on track. I was really down in the dumps on Friday before it became clear how bad a candidate he is.
To get a sense of the horsewhipping the General would take in the general read this and then start playing the ads in your head.
In terms of operations the Dean campaign is not derailed yet. His campaign remain a well oiled machine, raising money, building infrastructure, letting the faithful gallop out ahead. He'll be back after Clark tanks.
What about the polling data? you ask. He's polling 22% nine points ahead of Dean. He's polling 49 to 46 over Bush, the first Dem to poll ahead of the President. Meaningless. Pointless. Too early. Yoda, Gandalf and the Easter Bunny would poll ahead of Bush right now.
Don't get me wrong. I still think Clark's entry is an unmitigated disaster. The Dems have this huge distraction and drain on resources while losing a very effective critic of Bush's record on national security and peacekeeping/nationbuilding in Iraq and Afghanistan.
Tuesday, September 23, 2003
VIDEO:U.N. Falling Behind In AIDS Battle
I've written over and over, but African countries must be allowed to produce generics. Apparently some progress has been made on this.
Africa report (5:00)
The residents of the town of Lui in southern Sudan are used to life being hard. Civil war caused them to flee their homes and spend weeks on the move. Famine and disease have taken their toll as well. Now a new condition has emerged that appears only to afflict children. Its victims will never age. They are stuck in childhood. Seizures take over. Death is inevitable. The disease does not have a name but locals call it "nodding disease" because of the bizarre nature of its symptoms. The BBC's Andrew Harding reports from Lui on the disease that has the medical establishment baffled.
There were a couple stories that I wanted to link to on the World today, but they aren't available. There has been less available on the World, on Marketplace and there is less video on the NewsHour. It's bumming me out. How am I supposed to do the World's First Multimedia News Blog if they take away all the multimedia?
Over the weekend, Treasury Secretary John Snow persuaded the G-7 nations to issue a communique largely--and correctly--perceived as calling for a "market-based" rather than a "strong" dollar. In response, the value of the dollar fell. U.S. interest rates jumped. The stock market declined.
...For the next two years, however, we live not in the long but in the short run. What are the likely short-run consequences of John Snow's communique? The lower value of the dollar will boost exports eventually, but the links and lags between the value of the exchange rate and the volume of exports are long indeed: it will be twelve to eighteen months before we begin to see the rise in export earnings relative to baseline produced by the communique. The higher interest rates produced by the communique will start to put downward pressure on investment spending in nine months or so--next summer. The likely effect of the shift to a weak dollar policy is to open up a hole in aggregate demand that will raise unemployment between one and two years from now. The Federal Reserve is almost out of the ammunition it could use to offset the effect of the shift to a weak dollar policy on interest rates, and the Bush Administration has used up the political capital that it could have used to persuade Congress to adopt a fiscal policy to boost employment in the short run.
So we see that things are weird. The last thing I would want to do--were I sitting in the Treasury Secretary's chair, or were I sitting in Karl Rove's chair--would be to depress investment spending and thus raise unemployment in the second half of 2004. Yet that's what last weekend's policy move seems tuned to achieve.
Now so far the shift in dollar policy is not large. The movements in asset prices are small. The effects on the unemployment rate in September 2040 are small. Only if there are more signals that indicate that last weekend wasn't an ill-considered error but a substantive shift in policy will the movements in asset prices and in future investment become large.
Nevertheless, to push down stock prices when you are hoping for an investment boom to cure your business cycle malaise and to push up long-term interest rates just when the Federal Reserve is jawboning as hard as it can to try to keep them down--this is a very odd thing to do right now...
Go read the whole thing and continue on through comments.
Associated Oregon Industries is the business lobby in Salem, and its swagger in the halls of the Capitol rivals that of Barry Bonds rounding third base. And year in, year out, AOI's mantra has become numbingly familiar. Run government more like a business: cut unnecessary programs, curb overly generous benefits, eliminate inefficiencies.
So where, oh where, dear AOI, were you on Senate Bill 6?
In a session that too often seemed like a nightmare, SB 6 was a dream. The bill, which died in a Senate committee at the session's end, would have put all employees of public schools into a giant insurance pool, so that each one of Oregon's 198 school districts wouldn't have to, on its own, procure health, dental, disability and life insurance for workers. The efficiencies for Oregon are so obvious they'd be apparent to the (Associated Oregon Industries).
Having nearly 200 districts each seeking essentially the same services has never made a lot of sense. As state Rep. Max Williams told one of the Nose's associates, "It would be as if Fred Meyer had 200 stores in Oregon and each worked its own deal on insurance."
Three separate studies showed that putting all the state's K-12 employees into a giant insurance pool would save between $65 million and $100 million per biennium.
That's not chump change. It would pay for at least 600 new teachers. Or health insurance for thousands of working poor. Or a portion of some left-field bleachers for a new major-league baseball stadium in Portland.
Which is why when the bill was introduced, the only vocal complaints came from the Oregon School Boards Association, the group that lobbies on behalf of local education boards. OSBA currently gets more than half of its $3.8 million budget from administering an insurance pool that covers smaller school districts.
The OSBA readily admitted its self-interest in preserving the inefficient status quo, and by the end of the summer, the bill enjoyed wide, bipartisan support and even won the backing of the Oregon Education Association, the statewide teachers union.
But not AOI.
In testifying against the bill during the last days of the session, Lisa Trussell, one of AOI's half-dozen registered lobbyists, explained that the organization's free-market philosophy is so strong that it believes all employers, including public employers, should continue to have a choice of insurers, even while conceding that the current system might not be the "most efficient."
If that logic doesn't pass your sniff test, there's a reason. As Trussell noted later in her testimony, "We are not aware of too many of our members who have the benefit design that's been proposed in that bill." Translation: Among AOI's dues-paying members are several insurance agents and underwriters who stand to lose a bundle if they're cut out of the school districts' redundant insurance business.
The hypocrisy and cynicism of the business community can be just infuriating. It really galls me that the Sierra Club and NOW are lumped in with these guys as 'special interests'.
I wouldn't label this is DLC style healthcare reform. In fact I think it was a great idea. But it does underline why any DLC style healthcare reform will fail.
I saw Courtney Pine play "Giant Steps" in 1989 or 90. When he finished playing, my girlfriend and I turned to each other. We each had tears streaming down our faces. There was nothing sad about it. It was just that neither of us had ever heard anything so GOOD before. And I haven't since. That is the power of John Coltrane's music.
Nothing brings the tragedy of Jim Crow to life as vividly as "Alabama".
Nothing intertwines the pain of depression and addiction with the longing of the diaspora like "Naima".
And nothing brings me closer to believing in something transcendent and feeling a part of it than "A Love Supreme".
Take in the gorgeous presentation of 'Peace on Earth', 'Greensleeves', 'Naima', 'Blues Minor' and 'Crescent' at JohnColtrane.com.
Euripides 480 BC - Best known for the joke: Euripides? Imendides. | Augustus Caesar 63 BC - You're breathing a molecule from his last breath as you read this. What a trip dude. | Louise Nevelson 1899 - famous woodworker | Baroness Orczy 1865 - Author of the Scarlett Pimpernel; I love that part at the beginning of the book when the Pimpernel and a bunch of royals dressed as soldiers run through a check point in pursuit of the Scarlet Pimpernel and bunch of royals. | Victoria Chaflin Woodhull 1838 - First woman to run for president, against Grant no less. | 1967 Harry Connick Jr - Something stirs in Meg Ryan's loins.
Died on this Day:
Sigmund Freud 1939 - Great popularizer of cocaine and psychoanalysis. Apparently ten years of Depression was more than he could bear. | Carl Rowan 2000 - US journalist
Events of this Day:
1642 - Harvard College in Cambridge, Massachusetts, held its first commencement. Lawrence Summers pisses of head of Puritan Studies program. | 1779 - John Paul Jones declares, "I have not yet begun to fight!". Crew asks, "What are you waiting for? The damn HMS Serapis is right there and it's coming our way." | 1912 - 1st Mack Sennett "Keystone Comedy" movie released | 1926 - Gene Tunney defeats Jack Dempsey for world heavyweight boxing title, | 1933 Yanks commit 7 errors in 1 game but beat Boston 16-12. Hard to believe. | 1952 - Republican vice-presidential candidate Richard M. Nixon delivers the "Checkers" speech. Scoundrels the world over get a new lease on life. | 1957- nine black students who had entered Little Rock Central High School in Arkansas were forced to withdraw because a white mob had formed outside. | 1962 ABC's 1st color TV series - The Jetsons | 1973 - The largest known prime number, 2 ^ 132,049 - 1, is calculated. - 6th graders the world over breathe a sigh of relief. | 1974 - Cover of 'People' Gloria Steinam. | 1977 Cheryl Ladd replaces Farrah Fawcett on Charlie's Angels. Not an improvement as such, but it happily expands the universe of Angels to 4. (It will later balloon to 9) | 1979 - Jane Fonda & 200,000 attend anti-nuke rally in Battery Park, NYC. 'I'm not Fonda Hanoi Jane' bumberstickers enjoy renewed popularity. 'Barbarella' does not.
No need to wonder. The answer is here.
From the NY Times:
BAGHDAD, Iraq, Sept. 22 - Ahmad Chalabi, the president of Iraq's interim government, is in New York this week to press alternatives to the Bush administration's occupation policy in postwar Iraq, he and his aides say. In the process, he may complete a personal transformation from protege of Pentagon conservatives to Iraqi nationalist with a loud, independent voice.
...He demanded that the Iraqi Governing Council be given at least partial control of the powerful finance and security ministries, and rejected the idea of more foreign troops coming to Iraq.
Mr. Chalabi's strategy, he says, is to get from the United Nations General Assembly sovereign status for the unelected 25-member Governing Council. This move to lobby other nations for a swift transfer of some sovereignty is going down poorly in Washington, according to the Iraqi leader's aides.
Mr. Chalabi has sent representatives to France and Germany to discuss putting Iraqis back in charge under a new United Nations mandate that would end American control of the occupation, even if American troops remain in Iraq. His aides say he also plans to tell the Senate that the United Nations could save billions of dollars on Iraq's reconstruction by allowing an Iraqi administration to handle it.
..."They can start by putting Iraqis to be in joint control, with the coalition, of Iraqi finances," he said. "All of these are measures that would demonstrate increasing sovereignty in Iraq." Asked when, he replied, "Right away."
This from a guy who presided over the collapse of the Petra bank in Jordan and fled an embezzlement conviction.
...Mr. Bremer, ... told the Iraqi leaders - several of them returned exiles like Mr. Chalabi - that he was in charge and that they did not have broad enough support in the country to govern.
Mr. Chalabi's aides say that was when they began to organize their campaign to reverse the decision. When France intervened this month with a proposal to turn over sovereignty within weeks to the Governing Council, one of Mr. Chalabi's aides gave voice to the opportunity. "We don't want to come out in the open and pick a fight with Bremer," he said, "but the sovereignty issue is coming to a head, and it is pretty clear that a breach is coming pretty soon between the Governing Council and Bremer."
Another aide was more blunt: "We are going to find a place where we can pick a fight."
As I've said repeatedly: the Administration is going to regret ever having had anything to do with this guy. So areIraqisaqi's. This is a situation where long term relationships are going to be important. Relationships with the US, relationships with his new countrymen. It's clear that this guy doesn't have a loyal bone in his body.
These moves seem designed to begin building a political base in Iraq. The last thing Iraqis need right now is some Washington lobbyist pandering to them, telling them that they are ready to take it from here. They desperately need a leader of moral force who can layout the difficult steps need to achievement stability and independence.
Monday, September 22, 2003
"I do think it would be helpful to get the United Nations in to help write a constitution. I mean, they're good at that. Or, perhaps when an election starts, they'll oversee the election," Bush said in an exclusive interview that aired on the Fox broadcasting network on Monday night.
This is welcome news, though the devil is in the details. We certainly could use some help. Our troops are getting worn out and many reservists face losing their employment at home. Many of the tasks we face are not ones that our troops are well equipped to deal with. At the same time their tours are being extended. Diversifying the personnel and resources on the ground in Iraq could go a long way towards turning a bad situation around.
The article then goes on to run through various world leaders' response to what's brewing at the UN.
French President Jacques Chirac was quoted Monday saying his nation does not intend to block the new U.N. resolution sponsored by the United States, and offered to help train Iraqi police and military.
Good news. (Though France has slowly been bringing about the unraveling of several conservative's faculties. It would be a shame if they didn't finish the job before doing the right thing.)
Germany's ambassador to the United States, Wolfgang Ischinger, told Fox News that the bad blood between the United States and countries that led the U.N. anti-war fight "is all past history."
"We must join forces, we must work together, to get the issue of combating terrorism right," he said, calling Germany the United States' "best ally in Afghanistan." But, he added, Germany is prepared only to help "in a limited way" in Iraq. "We're not here to make the mission in Iraq more difficult," Ischinger said. "We're here to help."
Russian President Vladimir Putin, whose country has veto power on the Security Council, suggested that America's failure to stabilize Iraq has convinced him he was right in opposing the war. Putin told reporters over the weekend that the United Nations "must have a real role, not a decorative role" in Iraq.
Then Syria made some reasonable, ludicrous demands. Whoops.
Elsewhere in the article Bush gets all huffy that Ted Kennedy has said that we bribed countries into the Coalition of the Willing. C'mon aside from a name that just drips with disingenuousness, the coalition rollcall read like a Unicef pledge drive.
Great news on tap for Liberia.
Mains electricity will be restored to parts of Monrovia within a few days, more then 10 years after it was cut off during fighting that damaged a hydro-electric power station, the European Union representative in Liberia said on Wednesday. Geoffery Rudd told reporters that power would be restored gradually using a diesel generator and fuel supplied by the EU. "For the past days the EU in collaboration with the Liberia Electricity Corporation [the state power company] have tested the power distribution lines in Monrovia," he told reporters. "Within a matter of days, electricity will be supplied once more."
It sounds like things are quickly improving in Liberia. Again, one of the things that I like most about this situation is that Africans did the majority of the heavy lifting here. Certainly, it will require aid and assistance from Western nations to help get Liberia running again--the problems are too big to go away in just a number of months.
Still, the idea that other African nations can help to police their own corrupt leaders, and can help to re-build the failed states, is a good one.
It is good to see. However, in Africa nothing is ever as it seems and disaster lies just around the corner. Still...
"Smoke On the Purple" by Miss Frenchie
Deep Purple's 'Smoke on the Water' Vs. the Rolling Stones' 'Sympathy for the Devil'
After you click in the song to play it, refresh your page to restart the GIF. She dances to the music, perfectly. You really don't want to miss it.
You can also find it with past songs of the week in the margin, filed under 'song of the week'.
From LA Weekly:
Around quitting time, Tod Hackett heard a great din
on the road outside his office. The groan of leather
mingled with the jangle of iron and over all beat the
tattoo of a thousand hooves. He hurried to the window.
- 'Day of the Locusts' Nathanel West
For a long time it’s seemed like quitting time in the world of punk rock, and, to put it simply, the Locust are the first band in a long time that makes you want to hurry to the window...
Anti records | Listen: Pulling the Christmas Pig
...Although the WTO makes decisions that are far more important than most elections it can affect entire countries, even continents, for generations merely to say its name is to see people's eyes instantly glaze over. This was even true among the journalists in Cancun, most of whom found the meeting punishingly dull. One jocular Latino journalist kept muttering, "The WTO kills reporters, the WTO kills reporters"; Who could blame him? Most of the action took place in private, and the negotiations were conducted in language so arcane that many smaller countries didn't have a single lawyer who could parse the legal ramifications of what was being proposed. In trade negotiations, as in so much of modern life, power belongs to those who understand and control the fine print.
...Dr. Shiva and her fellow panelists explained how American and European corporations (with the help of their governments) are busily engaged in what one called "The Second Age of Colonialism."; Where the first age involved conquering entire countries and stealing their resources, this cunning new age simply involves taking indigenous life forms, claiming patents on all or part of them (sometimes just a microbe or specific gene) and then using intellectual-property trade agreements (known as TRIPS) to help enforce them: Monsanto sued Canadian farmer Percy Schmeiser for a patent violation when a genetically modified strand of canola blew into his fields and began growing.
The patenting of living things clearly seems to violate any rational notion of intellectual property, if not of morality - a cell is not the same as a cell phone - yet hundreds of such life-patents have already been granted for things like a Peruvian worm that contains a microbe useful in killing cockroaches. Although many other patent requests have been denied - including the preposterous attempt to lay claim to the genetic makeup of traditional basmati rice - major corporations keep filing claims, in part to exhaust the money and time of groups like Greenpeace that oppose them. Indeed, at the moment, Shiva is taking a key role in fighting Monsanto's recent European patent of a basic strand of Indian wheat called Nap-Hal.
"It's absurd," she said. "This wheat is the product of 10,000 years of farming by farmers and 100 years of research by scientists. All Monsanto did was buy the Lever collection of wheat. It picked wheat from the public collection and claimed it invented it."; And the absurdity doesn't stop there. With the granting of such patents and the wealthy nations attempts to make such rights part of trade negotiations, we could one day reach the point where Indian farmers can be sued for planting the wheat that their families have grown for hundreds of years.
..."They were grinding it out," Tom Hayden said of the protesters on the plane back to L.A. "I don't mean this as a criticism. Sometimes you've got to do that."
...at the opening of a major Aids conference in the Kenyan capital Nairobi. Thousands of doctors, politicians and Aids activists have gathered for what is seen as an important opportunity for Aids experts to exchange ideas about best practice in combating the epidemic.
...Eleven million children have lost one or both parents to HIV/Aids.
He also predicted that Africa's security services would not be able to cope with the increased threat because they too have been seriously weakened by the epidemic. In some places four out of every 10 soldiers are infected with the virus.
...But the disease can be contained with the right programmes and resources, the report said. "After two hard, painful decades of experience and accumulated knowledge - much of it gained in Africa - African governments and the international community are beginning to understand what is required."
...The main headlines in the report are as follows:
The biggest concern about HIV/Aids is in Southern Africa. In Botswana
for example nearly 40% of the adult population is HIV positive.
It sounds alarm for pregnant women in southern Africa.The World Health
Organisation found that more than one in five tested at the end of 2002
had the Aids virus.
The situation in East Africa is improving. The overall prevalence of HIV/Aids
there "is slowly declining," the report said.
Praise was also lavished on several countries in West Africa, which has the
lowest prevalence rate of Africa's subregions.
The Bush Administration pledged $3 billion to help fight AIDS in Africa yet denied those countries the right to begin producing affordable generics. Is that pledge about fighting AIDS or funnelling tax dollars to big donors. Before you point out that the research that produced those drugs cost a lot of money and those companies should be allowed to set the prices that they need to recoup, let me say this: A) They are priced out of that market, they aren't making the profits that they could in Africa because no one can afford them B) Certainly some sort of deal could be worked out were they are paid a modest royalty on the generics. Marketing, production and distribution would be handled by the African governments or companies so the royalty would be pure profit.
A good reminder of what our soldiers are putting on the line.
$10,000 bill and other large denominations.
Pictures of very BIG BILLS.
Defense Intelligence Agency Refuses to Declassify Info on Project Bojinka
I sent the National Security Agency a Freedom of Information Act request asking for files on Project Bojinka. (Bojinka was the plot by radical Islamists—led by WTC-bomber Ramzi Yousef—to 1) blow up a dozen US passenger jets in mid-flight, 2) assassinate President Clinton and the Pope, and 3) ram hijacked passenger planes into US landmarks, including the Twin Towers, the Pentagon, the White House, CIA Headquarters, and the Sears Tower.) The plot was discovered in 1995 when authorities in the Philippines raided Yousef's apartment.
The NSA said that it would cost me thousands of dollars for them to search for Bojinka documents, then screen them for possible release. Even if they decided that not a single document was releasable, I'd still have to pay the outlandish fees.
One of the Bojinka documents that the NSA had in its possession was created by the Defense Intelligence Agency, so the NSA asked the DIA to review it for release. Below is the DIA's reply.
You, citizen, are not allowed to know anything about the proto-9/11 plot called Operation Bojinka.
Sunday, September 21, 2003
Deconstructing A Talking Kitchen Object
Who knew you could write a column about this?
Oh Come On! The Atkins Diet Harmful?
And you thought keytosis was the only risk!
Robert Mugabe Has A Job Opening
Candidates should be able to demonstrate skill in systematically starving millions of people to death.
The FIFA Women's World Cup Kicks Off
Former Atlanta midfielder Homare Sawa leads Japan past Argentina...Germany tops Canada...DPRK shuts out Nigeria...Norway 2-0 over France